Supervisor Jane Kim seeks 30% threshold for affordable housing

30% of new units would be priced below market rate

Updated 10:49 am, Tuesday, June 17, 2014

(06-17) 10:47 PDT SAN FRANCISCO -- San Francisco residential builders are facing off against affordable housing advocates over a proposed November ballot measure designed to ensure that 30 percent of all new units are below market rate.

The measure, proposed by Supervisor Jane Kim, would hold market-rate developers to more rigorous and time-consuming scrutiny anytime the ratio of affordable housing in the city's development pipeline slips below the 30 percent threshold.

The idea, Kim said, is to create a more balanced spectrum of residential development at a time when housing costs in San Francisco are the fastest rising in the United States, jumping 20 percent since March 2013. It is being submitted to the Board of Supervisors on Tuesday, the deadline for getting city-sponsored measures on the ballot.

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Crafting a compromise

While the city is in the midst of a building boom, with more than 4,000 units under construction or recently completed, most of the development focuses on well-paid tech workers moving here to work for fast-growing companies such as Uber, Twitter and Salesforce.

"Housing affordability is the crisis of the city today, and this is something voters will resoundingly support," Kim said. "We should get to 30 percent at minimum."

Affordable housing advocates have been pushing for a measure like this for years, but so far San Francisco's development community sees little it likes. They argue that the measure will give antigrowth activists a tool to slow down or block new housing by adding a discouraging level of review.

"It's a NIMBY dream tool, an opportunity for endless lawsuits and appeals at a time when we need housing production more than ever," said Tim Colen, executive director of the Housing Action Coalition. "The idea that by punishing market-rate housing that it will deliver more affordable housing makes no sense."

In an attempt to get the broadest possible support, Kim has been meeting with builders and housing advocates in an attempt to craft a compromise. She said she has agreed to limit the initiative to developments larger than 25 units, and to grandfather in projects that will be in the pipeline by the end of the year, when the measure would take effect.

Emerald Fund Chairman Oz Erickson, who has built more than 3,000 units in the city, said the revisions have improved the proposition.

"She has ... made it significantly better, but I believe the correct way of doing complicated zoning is legislatively rather than at the ballot box," he said.

The measure would add both time and cost to new housing creation in San Francisco, already perhaps the most expensive and difficult place to build outside of Manhattan, Colen said. It typically takes a development two years to win approvals and another six to eight months to obtain building permits. The ballot measure could add a year or two to the process, he said.

'A very high bar'

Colen, along with Erickson and other developers, argues that the focus should be on finding more public money for affordable housing rather than making it more difficult to build market-rate projects.

Developer John Stewart, whose company is building 742 affordable units in Hunters Point, said Kim's 30 percent goal is laudable but particularly unrealistic given that Gov. Jerry Brown has abolished redevelopment agencies, which used tax increment financing to help fund more than 10,000 affordable housing units in San Francisco.

"You are putting up a very high bar at a time when the chances of meeting it are very difficult," Stewart said.

Kim agrees there should be more funding for affordable housing. Ideally, she said, there would be companion measures on the ballot: one that discourages gentrification and another that addresses how to raise money.

"We picked a moderate and reasonable goal," she said. Affordable housing "advocates wanted 50 percent. We picked (30 percent) for a reason. We have historically met it and we can continue to meet it with financial resources."

On Tuesday, Kim said she will introduce two identical proposals - the current plan that would be placed on the ballot and couldn't be changed, and a second measure that could be changed by the end of July with the support of five other supervisors if a compromise can be worked out between the two sides in the debate.

Changes to the second measure would probably be focused on providing some revenue to help build more affordable housing, she said.

Mayor's housing plans

Mayor Ed Lee has made the production of housing a centerpiece of his administration, pledging to create 30,000 units over the next 20 years. Lee recently introduced a proposed budget with $94 million for affordable housing.

One housing advocate said that, in addition to funding affordable housing, the city needs to discourage rampant gentrification.

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